Honeywell Lifts FY12 EPS View As Q1 Profit Tops Estimates - Update

4/20/2012 8:46 AM ET

Diversified conglomerate Honeywell International Inc. (HON) on Friday lifted its full year earnings forecast, buoyed by a strong first quarter and favorable outlook for major markets. Earnings and sales topped Wall Street estimates.

The world's largest maker of airplane cockpit controls now expects earnings per share in the range of $4.35 to $4.55, compared to the previous forecast of $4.25 to $4.50, excluding any mark-to-market pension adjustments. The company tightened its sales forecast to $38 billion to $38.6 billion from the prior range of $37.8 billion to $38.9 billion.

On average, 21 analysts polled by Thomson Reuters look for earnings of $4.44 per share on revenues of $38.53 billion.

Chairman and CEO Dave Cote said, "Honeywell had a terrific start to the year highlighted by higher than expected organic sales, 70 basis points of margin expansion, and strong double-digit earnings growth. We've seen good momentum in the U.S. and our key high growth regions, which is more than offsetting softness in Europe impacting our short-cycle businesses."

Net income attributable to the company climbed to $823 million from $705 million. Earnings per share grew to $1.04 from $0.88. Analysts expected earnings of $0.99 per share for the quarter. Analysts' estimates typically exclude special items.

The company had reported a loss in the preceding quarter, reflecting hefty mark-to-market pension adjustments.

Aerospace sales were $2.95 billion, up over 9 percent from the prior year. Organic growth was 8 percent primarily due to an 18 percent increase in the Commercial end markets, partially offset by lower services revenue in Defense and Space.

Sales from Automation and Control Solutions rose about 4 percent to $3.79 billion. Process Solutions and Building Solutions and Distribution saw growth in the quarter and ACS continued to benefit from new product introductions as well as geographic expansion.

Performance Materials and Technologies generated $1.62 billion, a growth of 19 percent from the prior-year period. The business benefited from strong UOP catalyst and licensing sales, the phenol plant acquisition, and strong volumes in Resins & Chemicals.

HON closed on Thursday at $58.00, compared to the previous close of $58.73, on a volume of 4.54 million shares. The stock is rising 3.5 percent in pre-market.